“Escrow” is one of those words that sounds simple until you have $10,000 sitting in one. Then it suddenly matters where that money actually is, who can move it, and what stops anyone from running off with it. Here’s the complete map of what happens to your money on a Zoooom car purchase.
Step 1: Authorization
You tap “Buy” on a listing, enter your card details, and confirm. Within about two seconds, three things happen: Stripe (our payments processor) sends an authorization request to your card issuer. Your issuer’s fraud check fires. If it passes, your issuer reserves the funds against your card’s available credit and sends back an approval code.
At this point, the money has not moved. It’s reserved, like a hotel room on a credit card hold. You see the charge as “pending” on your card statement. Your available credit drops by the transaction amount, but the actual settlement hasn’t happened yet.
Step 2: Capture
Immediately after authorization, Zoooom captures the payment. “Capture” is the step that turns the hold into a real transaction. Your card issuer commits the funds, and Stripe begins routing the money toward our merchant account, where it’ll arrive in 1–2 business days.
The reason we capture immediately instead of waiting until handoff: card authorizations expire (typically after 7 days). If we held an auth open and the deal didn’t close in time, the buyer’s funds would auto-release and we’d have to redo the entire authorization. Capturing immediately means the funds are committed and we can hold them in escrow indefinitely if the handoff takes a while.
Step 3: Escrow
Once captured, the funds sit in Zoooom’s escrow account at our regulated payments partner. This is the part people care about most, so let’s be specific.
Where the money actually is
- The funds are held in a custodial account at a federally regulated financial institution.
- The account is segregated from Zoooom’s operating funds. Zoooom can’t use buyer escrow money to pay our own bills.
- Buyer-side withdrawal requires either both parties confirming handoff or a Zoooom-resolved dispute.
- The funds are insured up to FDIC/SIPC limits at the underlying institution.
From the moment funds enter escrow until the moment they release to the seller, neither party can unilaterally move the money. The buyer can’t pull it back without seller agreement or a successful dispute. The seller can’t access it without the buyer confirming handoff. Zoooom can’t spend it.
Step 4: The handoff window
With funds safely in escrow, you and the seller schedule a time and place to meet. We strongly recommend a public location during daylight hours — coffee shop, mechanic’s parking lot, bank lobby. You bring your driver’s license. The seller brings the keys, the signed title, and a bill of sale.
You inspect the car. If something is off — the car isn’t what was described, the seller can’t produce a clean title, anything — you don’t tap confirm. The money stays in escrow. Either party can open a dispute from the Deal Center and Zoooom support takes it from there.
Step 5: Dual confirmation
Assuming everything checks out, the seller hands over keys and signed title. You both open the Zoooom app and tap “Confirm handoff.” Both confirmations must come in within a few minutes of each other — we use location verification to confirm you’re in the same place, and the system flags handoff confirmations that happen far apart (in time or distance) for review.
The reason for dual confirmation: it makes one-sided fraud essentially impossible. A buyer can’t claim the car was never delivered if the seller has a confirmation receipt. A seller can’t claim the buyer never paid if the buyer has a payment confirmation. Both confirmations + the location match = a court-admissible record of what happened.
Step 6: Release
The moment both confirmations land, Zoooom releases the vehicle price to the seller’s connected bank account. For most US banks, the money posts within minutes. Some banks batch incoming credits and post once or twice per day, so “same day” is a safer expectation than “same minute,” but most sellers see funds in their account within an hour of confirmation.
What Zoooom keeps from the transaction: the $100 service fee. What Zoooom does not deduct: nothing else. The seller receives the full vehicle price as listed.
What if the buyer disputes the charge later?
This is the question every seller cares about. Credit card chargebacks can be filed up to 120 days after the transaction. In theory, that means a buyer could pay for a car, take possession, and then dispute the charge with their bank weeks later.
Zoooom’s answer: we absorb chargeback risk so sellers don’t have to. If a chargeback is filed, we respond with the documentation we collected during the transaction — identity verification, vehicle ownership records, the dual handoff confirmation with location proof, the signed bill of sale, and the in-app message history between buyer and seller. We win the overwhelming majority of these disputes because the documentation is airtight.
In the rare case where we lose a dispute, Zoooom eats the loss. The seller keeps the money that was already released. That’s part of what the $100 service fee buys: we’re the dispute layer between you and the card networks.
For the complete picture of fees, settlement timing, and security, see our Payments guide.